Dictyostelium p21-activated kinase B (PakB) phosphorylates and activates class I myosins. PakB colocalizes with myosin I to actin-rich regions of the cell, including macropinocytic and phagocytic cups and the leading edge of migrating cells. Here we show that residues 1-180 mediate the cellular localization of PakB. Yeast two-hybrid and pull-down experiments identify two proline-rich motifs in PakB-1-180 that directly interact with the SH3 domain of Dictyostelium actin-binding protein 1 (dAbp1). dAbp1 colocalizes with PakB to actin-rich regions in the cell. The loss of dAbp1 does not affect the cellular distribution of PakB, whereas the loss of PakB causes dAbp1 to adopt a diffuse cytosolic distribution. Cosedimentation studies show that the N-terminal region of PakB (residues 1-70) binds directly to actin filaments, whereas dAbp1 exhibits only a low affinity for filamentous actin. PakB-1-180 significantly enhances the binding of dAbp1 to actin filaments. When overexpressed in PakB-null cells, dAbp1 completely blocks early development at the aggregation stage, prevents cell polarization, and significantly reduces chemotaxis rates. The inhibitory effects are abrogated by the introduction of a function-blocking mutation into the dAbp1 SH3 domain. We conclude that PakB plays a critical role in regulating the cellular functions of dAbp1, which are mediated largely by its SH3 domain.